Sustainability Audits

As consultations on both the Renewable Heat Incentive (RHI) and Feed in Tariff Schemes (FiT) in 2016 have now concluded, deployment rates for biomass derived heat and power generation are once again surging ahead. We felt that it would be a useful time to share our knowledge of the sustainability criteria from an auditor’s perspective. Hopefully this will assist existing, new and prospective operators of these plant to easily comply with the requirements of the criteria by making sure they have the necessary processes in place to enable them to demonstrate their compliance come the audit.

Sustainability audits have become an accepted part of operating a renewable energy generating station which is subject to the sustainability criteria under the Renewables Obligation Scheme (RO) and the RHI scheme. The sustainability criteria were introduced in order to demonstrate that biomass use in the heat and power sectors actually achieves a true carbon reduction versus equivalent fossil fuel derived heat and power.

Following the 2016 government review of the Feed in Tariff Scheme (FiT) support for anaerobic digestion (AD), sustainability criteria will be introduced from 1st May on FiT generation payments to new AD generators. In addition, feedstock restrictions are being introduced under both the RHI and FiT schemes to new applicants.

The focus of this article will focus on two key aspects under the sustainability criteria which apply under the RO, RHI and FiT schemes and apply to all generating stations:

  • Greenhouse Gas Criteria
  • Land Use Change Criteria

Operators using wastes as their feedstock materials / fuel are exempt from the criteria (yet still need to report against them) whilst those using residues and products or co-products must meet both. The exact scope of the reporting requirements varies depending on fuel classification.

How to calculate your GHG emissions

For all operators requiring an annual sustainability audit, you will need to use the ’actual value method’ to calculate your GHG emissions. This means that you will need to collect your own data from your operations as opposed to relying on default values which Ofgem provide within their carbon calculator tool.

GHG emissions are calculated for each type of fuel used in a fuel chain with emissions from each link in the chain being added together to assess the GHG emissions of the full lifecycle as shown in the image below (this fuel chain is a simplified chain for a biomethane plant):

Fuel Chain.JPG

The types of ‘actual data’ which will need to be recorded under each of these links in the fuel chain will include, fuel use, fertiliser use, distances transported, plant efficiency, where biogas is used in the process and biomethane exported.

Continuing with the above biomethane example, had the maize been supplied by an external party, cultivation and harvesting data would be required from the supplier of the feedstock in order to complete the GHG calculation. This is where a detailed supply agreement can be useful in clearly setting out what information you will require from your supplier along with the supply of the feedstock material.

The above types of data will form part of your evidence pack which your auditor will ask for when it comes to verifying your GHG calculations.

Land Use Criteria

Land use criteria are divided in to two categories, Land Criteria for woody biomass and Land Criteria for non-woody biomass. We are going to stick with our biomethane plant example using maize silage which falls under the non-woody category. For additional information on the criteria for woody biomass, BEIS published an informative advice note which covers all aspects of the criteria. The advice note can be found here.

Under the land criteria for non-woody biomass, the operator must demonstrate that the land from which the biomass was sourced was not a protected area. In order to do this the operator must first consider the land category from which the biomass as derived. The various land categories are described in the relevant scheme guidance. Using our maize cultivation example the land category is likely to be Cropland-non-protected. This land category complies with the land criteria however the operator needs to provide evidence that the land category has not changed since 2008 from a protected area. Evidence can be in the form of aerial photographs, satellite imagery, historic maps, land register entries and site surveys. Many of our clients use historic maps or Google Earth satellite imagery which now features historic images for most parts of the UK.

The evidence should be collated for each field the maize has come from in order to verify compliance with the land criteria and this should form part of the evidence pack.

Other Requirements

As well as the two aspects of the sustainability criteria discussed above, operators must agree fuel measurement and sampling (FMS) procedures with Ofgem. The FMS procedures include agreements on determining the mass or volumes of fuels used, the energy content of the fuels (calorific value) and any fossil fuel derived ‘contamination’ within the fuels. Ofgem applicant guidance on FMS procedures can be found here.

The approved FMS procedures should be provided as part of your evidence pack and will form part of the audit. Your auditor will review their appropriateness and efficacy in providing a suitable means for quantifying fuel use for your generating station. Records demonstrating compliance with your FMS procedures such as feedstock records, energy production and fossil fuel use will be required for the full audit period.

The Sustainability Audit

As well as verifying GHG criteria, Land criteria and FMS procedures, your auditor will be considering the processes and systems you have in place which facilitate the ongoing gathering of data which forms your evidence pack. Key questions the auditor is required to consider include:

  • Are there written procedures in place?
  • How accurate and reliable is the data being presented?
  • What controls are in place to protect against fraud or error?

Consider how your operations will be able to demonstrate this to your auditor. A management system is useful as it provides procedures which employees can be trained against and follow to ensure they are taking the necessary action to provide your audit trail. Limit access to records to only those personnel who require access and ensure your IT infrastructure and physical record keeping processes are secure.

 

Following the above pointers from day one of your operations will ensure you are collecting an auditable trail of evidence which will make you annual sustainability audit a straightforward process.

Please get in touch if you would like to discuss any aspect of the sustainability criteria and sustainability auditing for your biomass fuelled generating station.